Vince Cable courted controversy again yesterday - by describing his own Government's policy as 'Maoist' and 'chaotic'.

The Lib Dem business secretary made his comments just after returning from a trade mission to China, where Chairman Mao ruled from 1949 to 1976.

It comes just weeks after his astonishing attack on capitalism at his party's conference, in which he described bankers as 'spivs'.

Mr Cable has also repeatedly clashed with the Conservatives over their policy of a cap on the numbers allowed to move to Britain, which he has described as 'very damaging'.

Now the errant minister has described his own department's abolition of regional development agencies - a policy which was in his party's manifesto - as 'a little Maoist and chaotic'.

Off message: Vince Cable (second left) with Michael Gove, George Osborne and David Cameron in China this week

In a speech at the annual dinner of the Lunar Society in Birmingham last night, he said the scrapping of RDAs had been poorly executed.

The agencies, which distribute central Government funds to businesses around the country, will be replaced by local economic partnerships, which will only be able to get money from councils.

He said: 'We're investing heavily at a local and city level to reverse years of terrible over-centralisation in London that has led to a lack of independence for cities.

'Getting rid of the RDAs and bringing in LEPs has perhaps been a little Maoist and chaotic, but overall we're giving back to councils and local authorities the powers and incentives they need to see a resurgence in civic pride.'

A leaked letter in September revealed Government friction over the abolition of RDAs.

Junior minister Mark Prisk wrote to Mr Cable to warn him that many businesses viewed LEPs as being 'in danger of failing to aid economic growth.'

And the director general of the Confederation of British Industry, Richard Lambert, has described the way the quangos are being dismantled as a 'shambles'.

Chairman Mao in 1949, proclaiming the establishment of the People's Republic of China

Last night, shadow business secretary John Denham said: 'It is becoming impossible to find anyone who will say a good word about the government's so-called plan for regional growth, even their own ministers.

'While Vince Cable shows some honesty at the mess he is overseeing, this is little comfort for businesses which are experiencing uncertainty and chaos.

'Far from supporting growth, the government is harming the prospects of job creation and economic development - it is a damning failure.'

A spokeswoman for the Department for Business, Innovation and Skills said Mr Cable had been speaking in a personal capacity.

She said: 'We are determined that the transition from the Regional Development Agencies to new local economic development structures will be orderly, working to a clear timetable which leads to their closure in March 2012.

'However, total reform on this level is never easy, which is why we are working closely with all the RDAs to ensure that the transition programme runs as smoothly as possible. And we are also working closely with the new Local Enterprise Partnerships as they establish themselves.'

In his speech, Mr Cable promised that a while paper on growth, due out soon, will help galvanise British industry.

'This economy has become horribly unbalanced over the past 10 years in particular,' he said. 'We became over-reliant on sectors such as the financial industry while allowing manufacturing to decline.

'We mustn't lose sight of the fact that the UK remains the sixth largest manufacturing economy in the world. In the white paper, manufacturing will be top of the list because we need to rediscover the industrial brilliance this country was built upon.'